IRES Ltd. Malta

How to Buy Real Estate in Italy

Buying Real Estates in Italy is simple.

After you have found the right property you have to do the following steps:

1. Make a purchase offer (only if there is hope that a lower purchase price could be achieved), usually for a private seller and older Real Estates

2. Preliminary purchase agreement, if price and all details are agreed between the parties, usually the moment of the first down payment

3. Final contract in front of a Notary – final payment ONLY with registration in the ground book. Please do remember "Your best friend for buying properties in Italy is your Notary!" Trust him first and tell him everything.

There are no restrictions for foreign citizens to buy property in Italy! It is quite normal to draw up a preliminary purchase agreement between seller and buyer without the assistance of a lawyer. I do not recommend a purchase agreement between the agent and the buyer, unless the agent has a legalised power of attorney from the seller and the seller is informed about this preliminary purchase agreement, but unable to sign or be present at the moment of signature. Another reason could be the selected language you want to sign the contract in.
Usually a minimum of 10 % (ten percent) down payment or deposit has to be paid upon signing the preliminary contract. Sometimes this first deposit/down payment is regulated by the Italian “Caparra law”. If the seller fails to complete the purchase agreement, he has to refund not only the ten percent deposit, but twice the amount in form of a penalty. If the buyer changes idea he would lose the full down payment. The Caparra law should guarantee both sides the completion of the purchase. You may not find this law or procedure when buying new houses or apartments, which are still under construction. In case of new constructions the builder has to perform the construction work and the buyer has to pay step by step according to the procedure of the construction. In order to guarantee the completion of the work, the law in Italy changed a lot for the benefit of the buyer. I do recommend taking a full coverage for all payments, which is foreseen by the law 210 and guaranteed by an insurance company. Be careful that this insurance company has an AAA rating!
This new law 210 was created in order to guarantee the full refund of all down payments to the buyer, in case the builder is unable to complete the construction, as established in the preliminary purchase agreement. To obtain this coverage an additional cost of 1% might be added to the selling price.
The POSTUMA DECENALE is a legal document which gives a 10 year guarantee for the building to the buyer after the completion of the works.
We recommend the following buying procedure:
If you think that you have found the right property ask for a copy of the formal final contract - Atto notarile - and the copies of all registered floor plans - Schede Catastali (for a house) or Estratto Mappa (for a piece of land) or Elaborato planimetrico (for apartments). Take all those copies to a Geometra (of your choice), and ask him to prepare a final summary document for the notary – a Relazione per Atto notarile. The Geometra will cost you 400 to 500€.
If you do not know the seller or builder, or you do not have a good feeling, we recommend choosing a Notary outside the immediate area to avoid a possible conflict of interest and ask him to prepare the final contract in two languages (in case you do not speak good Italian). In case you want to buy a newly built property, where the buyers did the notary contract at the same Notary office, you may consider taking the same Notary, because he has a perfect knowledge of the project and can save you a lot of time and money. Never underestimate the authority of a NOTARY in Italy. He is always and completely on the side of the buyer; having to complete the full research on the property: title search - visura catastale - and he has to ensure the property is free of debts, mortgages and encumbrances by means of a search called the visura ipotecaria. You do not need a lawyer at all! The Notary in Italy cannot be compared to the Notaries anywhere in the world. In Italy a Notary is your best “friend” and will represent and protect always your interests. Once, all the searches are done and the Notary has prepared the final contract, your purchase should proceed quite straightforwardly. If a problem comes up, you can engage with the help of the Notary a lawyer to try and resolve it before signing the final contract.
If you want to buy a rental or commercial property, always engage a lawyer from the beginning. We do not recommend to buy Rental Properties unless you have a professional rental management onsite. Do not try to make it by yourself. Do not forget that Italy is a high income tax country.
The final contract usually takes place within 10 to 90 days after the preliminary contract, unless otherwise agreed. The balance of the purchase price has to be paid in the form of a mortgage payment, cash or a bank guaranteed check at the final contract stage. It is very hard to obtain a financing from an Italian Bank.
If you do not speak Italian you will need a qualified translator and/or ask the notary for a bilingual contract. (The translator might cost less.)
At the beginning of 2006 the Italian law changed in favour of the buyer. Now, instead of declaring a much lower price on the deeds (a common practice to save some purchase tax), you must declare the full purchase price of the property in the contract. However, you only pay purchase tax on the value as listed in the land register - the "valore catastale" - which is always much lower than the market value. This applies mostly for contracts between private individuals; it might change if the seller or buyer is an Italian registered company. If you buy a newly built property the purchase tax will be always calculated on the full amount shown in the invoice of the builder.
The full purchase price, all taxes and commissions must be paid at the final contract stage.
TAX
Purchase tax is the same for foreigners and Italians alike and the basic taxes are:
Ten percent tax for a second home (holiday or rental).
Three to four percent tax if you buy and declare the property as your main residence - prima casa – although any foreigner needs to take out Italian residency to do this.
The notary fee is usually calculated one percent of the valore catastale, but this can vary. WE recommend getting a price estimate before the final contract is signed.
The yearly property-tax payment (IMU ex ICI) is calculated on the valore catastale (similar to council tax) and is the sole responsibility of the new owner. This tax is very small compared to other European countries or America and is usually calculated by an accountant. Just to give you an idea the taxes for a small not luxury apartment are in-between 400 to 600 €; bigger apartments and small houses are from 600-1200 €; villas are starting at 1500 €
Holiday, Rental, Retirement Home, or your first home (prima casa)
In Italy, you can buy any property you want and also any number of properties. There are no limitations. Italian and foreign citizens pay the same property taxes and are taxed the same way. It does happen that Italians buy a property from foreign owners, but usually it is the other way round. And you can sell your property whenever you want for how much you want.

Useful Contacts
A qualified notary in Lombardy is
Dott. Christian Nessi in Como

A qualified notary in Tuscany is
Dott. Gianluca Cristiani in Piombino - Venturina

If you have more questions about purchase tax and yearly tax payments contact:
Dott. Luca Bassi in Como Lombardy or
Dott. Giorgio Nobili in Follonica Tuscany

The information provided herein is intended for your general knowledge only. I.R.E.S. Ltd recommends strongly verifying this information and assumes no responsibility for any consequences!